Question

For question #4 accurately answer each of the following:

Ch 01: Assignment-An Overview of Financial Management Businesses can be classified into the following forms: proprietorship, partnership, corporation, limited liability company (LLC), and limited liability partnership (LLP). Different forms of businesses have different characteristics. Which of the following characteristics belong to a proprietorship? Check all that apply. Profits taxed only once, at the individual (personal) level can easily raise large amounts of capital Subject to unlimited liability

Answer 1

1) Ans :
-Profits taxed only once , at individual level
- Subject to unlimited liability
Sole proprietory ship is fom of business where individual, who is owner, himself runs the business and is subject to unlimited liability. Unlike company , sole proprietor can not sell it's share of business to raise capital. Thus this form has an inability to raise capital

2) A partnership
In partnership , liability is unlimited and partners report their profit in their individual return

3) A LLP/LLC
LLP is kind of partnership except here liability are limited to share of contribution brought in by the partner